House prices have suffered their largest annual decline in 12 years as the mortgage crisis pushes buyers out of the market.

Prices slumped by 2.6pc in the year to June, down from a fall of 1.1pc in May, according to mortgage lender Halifax.

It is their biggest decline since June 2011.

Monthly prices dropped for the third consecutive month by 0.1pc in June, after remaining static in May, making the average home worth £285,932.

The Bank of England has increased interest rates for 13 consecutive times to 5pc, putting pressure on mortgage rates.

The average cost of a two-year fixed mortgage deal increased to 6.52pc on Thursday, according to Moneyfacts. A typical five-year deal tipped above 6pc for the first time this year earlier this year.

Read the latest updates below.